On-chain analyst: The sharp drop in FLOW price may be due to a private key leak that allowed attackers to mint millions of FLOW tokens

According to TechFlow, on December 28, The Block reported that the Flow Foundation announced on Saturday that it is investigating a potential security incident affecting its Layer 1 blockchain, which triggered a sharp sell-off of the FLOW token.

On-chain analyst Wazz was the first to point out this vulnerability after the price crash, estimating the stolen funds to be around $4 million. Wazz's analysis showed that the attacker used a wallet created about six months ago to mint millions of wrapped FLOW (WFLOW) tokens via the TransparentUpgradeableProxy contract. This pattern is consistent with a private key leak rather than a smart contract vulnerability.

Security expert Taylor Monahan stated: "There is a possible vulnerability in the Flow blockchain that allows attackers to mint native FLOW tokens as well as other bridged tokens such as WBTC, WETH, and stablecoins." She added, "It appears the loss is about $3.9 million."